Calendar of Tax Filing Dates

Calendar of Tax Filing Dates

Listed below is a calendar of important tax filing due dates for various reports and returns that may apply to your business.

January

__ 01/15/___ Final installment due for previous year estimated 

                     tax individuals and unincorporated businesses 
__ 01/31/___ Form 941 for withheld Income and FICA taxes
__ 01/31/___ Form 940 for FUTA taxes
__ 01/31/___ Form 943 for agricultural workers
__ 01/31/___ State payroll tax return
__ 01/31/___ State Sales tax return
__ 01/31/___ W-2 forms (wage statements) to be furnished to employees
__ 01/31/___ Information returns provided to various recipients such as 
                      subcontractors, retirees, landlords, mortgagors,etc.
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
February

__ 02/28/___ Information returns: Send to Government various 

                      1099 forms along with appropriate Transmittal Report
__ 02/28/___ W-2 forms and appropriate Transmittal Report to be 

                       sent to Government
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
March

__ 03/15/___ Corporation tax return (Form 1120 or Form 1120S) due for
                      calendar year filers.  Provide each shareholder with a copy of
                      Schedule K-1 (Form 1120S) or a substitute Schedule K-1.
__ 03/15/___ Corporation tax return extensions due for calendar year 

                       filers.  Form 7004, automatic (6-month) extension of time 
                      to file for corporations (good until Sept 15th).  
__ 03/15/___ S-Corporation election due if choosing to be treated as an  
                      S-Corporation beginning with this calendar year (Form 2553)
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
April

__ 04/15/___ Individual tax returns due (Form 1040) 

__ 04/15/___ Fiduciary tax returns due (Form 1041) 
__ 04/15/___ Partnership income tax return due (Form 1065).  Provide 
                      each partner with a copy of Schedule K-1 (Form 1065) or a
                      substitute Schedule K-1.
__ 04/15/___ Automatic (6-month) extension of time to file individual 
                      tax return due (good until Oct 15th). To do so, you must
                      file Form 4868, Application for Automatic Extension
__ 04/15/___ First installment estimated taxes due for individuals 

                      (and unincorporated businesses)

__ 04/15/___ Application for automatic (5-month) extension of time to 

                      file Fiduciary return (good until Sept 15th).
                      Form 7004 - Internal Revenue Service
__ 04/15/___ Application for automatic (5-month) extension of time to 
                      file Partnership return (good until Sept 15th).
                      Form 7004 - Internal Revenue Service
__ 04/15/___ Corporation first installment estimated calendar year

                      taxes due
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
May

__ 05/01/___ Employers tax return / forms due for first quarter

__ 05/01/___ Form 941 for withheld Income and FICA taxes due

__ 05/01/___ State Payroll tax return due

__ 05/01/___ State Sales tax return due

__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________

June

__ 06/15/___ Second installment estimated taxes due for individuals 

                      (and unincorporated businesses)

__ 06/15/___ Corporation second installment of estimated calendar 

                      year taxes due
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________

July

__ 07/31/___ Annual return of Employees Benefit Plan (5500 series) due

__ 07/31/___ Extension for filing Federal Annual return of Employee Benefit
                      plan Form 5558 (Rev. August 2012) (good until Oct 15th)

__ 07/31/___ Form 941 for withheld Income and FICA taxes

__ 07/31/___ State Payroll Tax return due

__ 07/31/___ State Sales Tax return due

__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________

August
No Activity This Month
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
September
__ 09/15/___ Third installment estimated taxes due for individuals
                      (and unincorporated businesses)
__ 09/15/___ Corporation calendar year income tax due for those that
                      obtained a 6-month filing extension
__ 09/15/___ Partnership calendar year income tax due for those that
                      obtained a 5-month filing extension
__ 09/15/___ Fiduciary calendar year income tax due for those that
                      obtained a 5-month filing extension
__ 09/15/___ Corporation third installment estimated calendar year
                      taxes due
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
October
__ 10/15/___ Final day for filing individual income tax return 
                      (Form 1040) for those that were granted 
                      6-month extension
__ 10/31/___ Form 941 for withheld Income and FICA taxes
__ 10/31/___ State Payroll Tax return due
__ 10/31/___ State Sales Tax return due
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
November
No Activity This Month
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________
December
__ 12/15/___ Corporation fourth installment of estimated calendar year 
                       taxes due for year
__ __/__/___ Other: __________________________________________
__ __/__/___ Other: __________________________________________

*** NOTE***
Any due date that falls on a Saturday, Sunday or legal holiday is generally extended to the next business day.

General Schedule of Tax Deadlines throughout the year. 

If any due date falls on a Saturday, Sunday or legal holiday, the deadline is moved to the next business day.  Deadlines for entities with a year-end other than December 31 are listed at the bottom of the page.

Form 1040 - Individual Tax Return

Due date April 15
Final extension October 15

Form 1040-ES - Individual Estimated Tax Payments

1st Installment April 15
2nd Installment June 15
3rd Installment September 15
4th Installment January 15 (following year)

Form 1065 - Partnership Income Tax Return

Due date April 15
Final extensions September 15

Form 1041 - Fiduciary (Trust) Income Tax Return

Due date April 15
Final extension September 15

Form 1120 - Corporation Income Tax Return

Due date March 15
Initial extension September 15

Form 1120S - Sub-S Corporation Income Tax Return

Due date March 15
Initial extension September 15

Form 709 - Gift Tax Return

Due date April 15
Initial extension Same as 1040

Form 706 - Estate Income Tax Return

Due date 9 months from the date of death
Extension Additional 6 months

Form 5500 - Employee Benefit Plan Income Tax Return

Due date July 31
Extension October 15

Form 990/990-PF - Charitable/Private Foundation Income Tax Return

Due date May 15
Extension August 15

Rules of thumb for entities with a year-end other than December 31

Form 1120 - Corporation Income Tax Return

Due 2.5 Months after Year End

Form 1120S - S Corporation Income Tax Return

Due 2.5 Months after Year End

Form 1065 - Partnership Income Tax Return

Due 3.5 Months after Year End

Form 1041 - Fiduciary (Trust) Income Tax Return

Due 3.5 Months after Year End

Form 990/990-PF - Charitable/Private Foundation Income Tax Return

Due 4.5 Months after Year End

Reference: Practice Enhancers, Able & Co.

Loan Agreement - Sample of Installment Note

SAMPLE OF AN INSTALLMENT NOTE

                                                     Date:_______________________, 20 ____.


FOR VALUE RECEIVED, we, (Comaker) _______________________, of _______________________, and (Comaker) _______________________, of _______________________, herein referred to as the undersigned, promise to pay to the order of _______________________(payee),  herein referred to as holder, at _________________________________ (Address) _______________________, (city)_______________________, (state), the sum of______________________ Dollars ($________________), with interest on any unpaid balance from the date at the rate of ___________ per cent (_________%) per annum and payable in equal successive monthly payments of _______________________ Dollars ($_________________)  commencing on _______________________, 20____, and continuing on the same day of each and every month thereafter until paid, except the final installment which shall be the balance due on this note.

1. Overdue Installments.  If any installment is not paid when due, the undersigned shall pay all appropriate collection charges.  In addition, the entire amount owing and full unpaid balance will at the election of noteholder become due and payable.

2. Attorneys' Fees.  The undersigned shall pay all reasonable attorneys' fees incurred by holder in enforcing any remedy hereunder.

3. Joint and Several Liability.  All obligations of the undersigned hereunder shall be joint and several.



__________   _________________________________
    Date                         Signature Of Co-Maker


__________ _________________________________
    Date Signature Of Co-Maker


__________ _________________________________
    Date Signature Of Holder

Reference:  Practice Enhancers, Able & Co.

Checklist for Sole Proprietor - Start-up Issues for New Business

Checklist for Sole Proprietor
Start-up Issues for New Business

Below is a checklist of actions that should be considered for the organization and operations of your sole proprietorship.
♦  Do assumed (fictitious) business name registration
♦  Consider tradename registration
♦  Apply for required operating permits, licenses, bonds
♦  Register for Federal SS-4 Tax ID #
♦  State ID# registration
♦  Register for State Sales tax number
♦  Register for State Unemployment, Withholding, Tax ID #
♦  Set-up bookkeeping systems for income/expenses, auto use, home office, equip. purchase, etc.
♦  Set-up bank / checking accounts
♦  Contact insurance company re. coverages (business liability, workers' comp, errors & omissions, disability, medical)
♦  If employees will be hired, order payroll deposit coupons and consider a personnel manual
♦  If subcontractors will be used,  have W-9 forms and consider a subcontractor agreement
♦  Establish association with loan officer
♦  Establish association with attorney
♦ Set up tax filing calendar of due dates (yearly, quarterly) 
♦  Consider putting spouse and children on payroll 
♦  Arrange for estimated tax payment filings 
♦ Consider a business pension / Profit Sharing plan (IRA, SEP, KEOGH)

Notes:

Reference:  Practice Enhancers, Able & Co.

Shareholders/Partnership Agreement

Shareholder/Partnership Agreement
he formation of a business with more than one owner is like a marriage.  However, according to last year's statistics, a marriage has a better chance of surviving 7 years than a business association does.  That means there is over a 50% chance the business association will end in dissolution within the first 7 years.

There are a number of reasons for this.  One of these involves a lack of initial communication among the owners/partners that leads to trouble down the road.  The biggest mistake people make in this regard going into a partnership association, whether it be a true partnership or as a shareholder in a corporation, or in a joint venture is the failure to set up an adequate partnership agreement.  Note that for the purpose of this report the term "partner" will be used interchangeably with the term "shareholder" or "associate," to make for easier reading.

This lack of initial planning leads to many misunderstandings about the responsibilities, financials, and possible changes in the partnership.  This alone will often initiate the actual destruction or break-up of the business association–even if it is financially sound.

So a word of warning:  Always have a form of a partnership agreement before you begin any business association with anyone else.  This can literally mean the difference between success and failure.  In keeping with this advice, some suggestions as to the content of the actual agreement are listed below.

Please understand that this is in no way meant to be a substitution for any legal advice you should obtain–and you definitely should consider consulting with an attorney to assist you with any partnership/shareholder agreements.  Rather, the enclosed guidelines are designed to help you decide which areas need to be considered in the drafting of such an agreement.

Thus, for your review are the following suggestions and tips on areas to consider in setting up a partnership/shareholder agreement:
1. Determine the official name and place of the business.
2. Date to be started, and duration/term  of business.
3. Nature of business activities, and scope of operations.
4. Names, addresses, and social security numbers of owners/partners.
5. Establish various accounting/recordkeeping issues such as tax year, accounting methods, type of corporation or partnership, required financial reports, bank accounts, division of accounting duties, place where records will be kept.
6.  Agree on various professional advisors to be used:  accountant, attorney, insurer, lender, etc.
7.  Determine each owner's work duties, positions, titles, responsibilities, work hours, fringe benefits such as sick pay.
8.  Agree on capital contributions and ratios per owner:  initial contributions to be listed and future contribution/withdrawal amounts to be discussed.
9. Decide on types of insurance coverages.
10. Agree on when and where business meetings will be held.
11. Decide on actual management authority of each partner.
12. Agree on draw amounts and/or guaranteed payments to partners.
13. Decide on profit distribution amounts and ratios per partner: how much, when to be done, by which authority and voting determinants.
14. Determine how future deficit funding will be handled.
15. Agree on methods and authority needed for borrowing money.
16. Establish a travel, entertainment, and expense account policy among partner/owners.
17. Decide how voting issues will be handled:  majority rule on all issues?  Unanimous vote on some issues?  Required quorum?
18. Agree on how to handle any disputes that can't be resolved through normal voting procedures:  a form of arbitration agreement should be established.
19. Set up restrictions on partners in their dealings with outsiders as representatives of the business.
20. Establish any required non-compete covenants.
21. Work up required sale-of-interest, buy-sell, or stock redemption agreements and valuation methods that would be used for these.
22. Arrive at agreements for change of partnership interests and valuation methods/determinants.
23. Decide how to handle possible changes in actual partners/owners. These issues center around such possibilities as admission of new partners, expulsion of existing ones, withdrawal or retirement, disability, bankruptcy, or partial liquidation of a partnership interest.
24. Agree on how future amendments to the partnership/shareholder agreement should be handled:  timing of issue, required voting percentages, etc.

Conclusion
In effect, a partnership agreement tries to deal with a number of important issues that fall into several categories:  Actual formation purpose, and scope; Management authority and duties; Capital contribution issues; Distribution, divisions of monies; Terms and Terminations; Changes and Transfers; Accounting/recordkeeping.

Since these issues can be quite complex, the use of a partnership/ shareholder agreement can literally be a lifesaver to the peaceful continuation of a business.  By getting all the pertinent issues of running a business out of the way before things get rolling, you can then spend the rest of the time in the most important quest:  trying to build up the business in these tough, competitive, changing times.

Reference:  Practice Enhancers, Able & Co.

Lease Agreement - Sample for Review Only

SAMPLE FOR REVIEW ONLY

COMMERCIAL LEASE

This lease is made between ___________________ of ___________________, herein called Lessor, and ___________________, of ___________________, herein called Lessee.

Lessee hereby offers to lease from Lessor the premises situated in the City of ___________________, County of ___________________, State of ___________________, described as ___________________, upon the following TERMS:

1. Term and Rent.  Lessor offers the above premises for a term of ___________________ years, beginning ___________________, 20____, and ending on ___________________, 20____, or sooner as provided at the yearly rent of ___________________ Dollars ($_______________), payable in equal installments in advance on the first day of each month for that month's rental, during the lease term.  All rental payments shall be made to Lessor, at the address specified above.

2. Use.  Lessee shall use the premises for _____________________________ only.

3. Care and Maintenance of Premises.  Lessee acknowledges that the premises are in good order and repair, unless otherwise indicated herein.  Lessee will  maintain the premises in good and safe condition.  Lessee shall be responsible for all repairs required, except the roof, exterior walls, structural foundations, and others as set forth:

4. Alterations.  Lessee will not, without first obtaining the written consent of Lessor, make any alterations, or improvements, in, to or about the premises.

5. Ordinances and Statutes.  Lessee shall comply with all statutes, ordinances and requirements of all local, state and federal authorities now and in the future, relating to the premises, affecting the use thereof by Lessee.

6. Assignment and Subletting.  Lessee will not assign this lease or sublet any portion of the premises without prior written consent of the Lessor, which will not be unreasonably withheld.  Any such assignment or subletting without consent will, at the option of the Lessor, terminate this lease.

7. Utilities.  Lessee will pay the following utilities:

Lessor will pay the following utilities: ___________________

8. Possession.  If Lessor is unable to deliver possession of the premises at the commencement, Lessor shall not be liable for any damage caused, nor will this lease be void or voidable, but Lessee will not be liable for any rent until possession is delivered.  Lessee may terminate this lease if possession is not delivered within __________________ days of the commencement of the term hereof.

9. Indemnification of Lessor.  Lessor will not be liable for any damage or injury to Lessee, or any other person, or to any property, occurring on the demised premises or any part thereof, and Lessee agrees to hold Lessor harmless from any claims for damages, no matter how caused.

10. Insurance.  Lessee, at his expense, shall maintain the following type of insurance coverage and public liability insurance:

Lessee will provide Lessor with a Certificate of Insurance showing Lessor as additional insured.  The Certificate will provide for a fifteen-day written notice to Lessor in the event of cancellation or material change of coverage.

11. Trade Fixtures.  All improvements made by Lessee to the premises which are attached to the premises such that they cannot be removed without material injury to the premises, will become the property of Lessor upon installation.  Not later than the last day of the term, Lessee will, at Lessee's expense, remove all of Lessee's personal property and those improvements made by Lessee which have not become the property of Lessor, including trade fixtures,  movable paneling, partitions, and the like; repair all injury done by or in connection with the installation or removal of such property and improvements; and return the premises in as good condition as they were at the beginning of the term.  All property of Lessee remaining on the premises after the last day of the term of this lease will be considered abandoned and may be removed by Lessor, and Lessee will reimburse Lessor for the cost of such removal.

12. Eminent Domain.  If the premises or any part thereof or any estate therein, or any other part of the building materially affecting Lessee's use of the premises, are taken by eminent domain, this lease will terminate on the date when title vests pursuant to such taking.  The rent, and any additional rent, will be apportioned as of the termination date, and any rent paid for any period beyond that date will be repaid to Lessee.  Lessee will not be entitled to any part of the award for such taking or any payment in lieu thereof, but Lessee may file a claim for any taking of fixtures and improvements owned by Lessee, and for moving expenses.

13. Destruction of Premises.  In the event of a partial destruction of the premises during the term hereof, from any cause, Lessor will forthwith repair the same, provided that such repairs can be made within sixty (60) days under existing governmental laws and regulations, but such partial destruction will not terminate this lease, except that Lessee will be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business of Lessee on the premises. If such repairs cannot be made within said sixty (60) days, Lessor, at his option, may make the same within a reasonable time, this lease continuing in effect with the rent proportionately abated as aforesaid, and in the event that Lessor will not make such repairs which cannot be made within sixty (60) days, this lease my be terminated at the option of either party.

14. Lessor's Remedies on Default.  If Lessee defaults in the payment of rent, or any additional rent, or defaults in the performance of any of the other covenants or conditions hereto, Lessor may give Lessee notice of such default and if Lessee does not cure any such default within ___________________ days, after the giving of such notice (or if such other default is of such nature that it cannot be completely cured within such period, if Lessee does not commence such curing within such     days and thereafter proceed with reasonable diligence and in good faith to cure such default), then Lessor may terminate this lease on not less than ___________________ days' notice to Lessee.  On the date specified in such notice the term of this lease shall terminate, and Lessee shall then quit and surrender the premises to Lessor, but Lessee shall remain liable as hereinafter provided.  If this lease shall have been so terminated by Lessor, Lessor may at any time thereafter resume possession of the premises by lawful means and remove Lessee or other occupants and their effects.

15. Security Deposit.  Lessee shall deposit with Lessor on the signing of this lease the sum of ___________________ Dollars ($____________) as security for the performance of Lessee's obligations under this lease.

16. Tax Increase.  In the event there is any increase during any year of the term of this lease in the City, County or State real estate taxes over and above the amount of such taxes assessed for the tax year during which the term of this lease commences, whether because of increased rate or valuation, Lessee shall pay to Lessor upon presentation of paid tax bills an amount equal to _____ % of the increase in taxes upon the land and building in which the leased premises are situated.  In the event that such taxes are assessed for a tax year extending beyond the term of the lease, the obligation of Lessee shall be proportionate to the portion of the lease term included in such year.

17. Common Area Expenses.  In the event the demised premises are situated such that there are common areas, Lessee agrees to pay his pro-rata share of maintenance, taxes, and insurance for the common area.

18. Attorney's Fees.  In case suit should be brought for recovery of the premises, or for any sum due hereunder, or because of any act which may arise out of the possession of the premises, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorney's fee.

19. Waiver.  No failure of Lessor to enforce any term hereof shall be deemed to be a waiver.

20. Notices.  Any notice which either party may or is required to give, shall be given by mailing the same, postage prepaid, to Lessee at the premises, or Lessor at the address shown below, or at such other places as may be designated by the parties from time to time.

21. Heirs, Assigns, Successors.  This lease is binding upon and inures to the benefit of the heirs, assigns and successors in interest to the parties.

22. Entire Agreement.  The foregoing constitutes the entire agreement between the parties and may be modified only by a writing signed by both parties.  The following Exhibits, if any have been made a part of this lease before the parties' execution hereof:


    __________________                       ___________________
          Dated                                                          Dated

    __________________                         ___________________
          Lessor                                                         Lessee


    __________________                         ___________________
          Address                                                      Address


    __________________                         ___________________
          Phone                                                         Phone

Reference:  Practice Enhancers, Able & Co.

Insurance Types & Requirements for Business

Insurance Types & Requirements for Business
Statistics show that many business owners tend to be remiss when it comes to various insurance coverages.  Sometimes it is because of a lack of funds to adequately pay for the recommended coverages.  Other times it is simply because the business owner just didn't know about the types of coverage that should be maintained.

In case the latter applies, the purpose of this report is to give a brief overview on the various types of insurance coverage to consider.  The lack of awareness of the required coverages is especially prominent in situations where the business(or a portion of it) is being operated out of your home.  The potential for disaster looms large here, since most regular home owner's policies become practically null and void if you start using the home for business purposes.

The following is a rundown on different coverages a business owner should consider:

Office-in-home coverage
If you work out of your home, you will find that your original homeowner's policy may become nullified such that you now have little protection at all for fire, theft, and accidents.  It is imperative that your insurance carrier be notified so a change in coverage can be made to incorporate the commercial activity in your home.

Even if you do not have any employees other than yourself working in the home, you can jeopardize your entire coverage by failing to disclose to the insurance carrier you are running a business in your home.  If a delivery person, or client should get hurt, you could find yourself without any coverage.

Similarly, if you have business equipment in the home and any accidental damages occur, or any thefts, you may find you have no coverage.  Most homeowner plans limit the coverage for various "business type" items such as computers.  So you will need to disclose to your insurance carrier about your business at home and adjust your coverage with appropriate riders or new policy coverages.

Worker's Compensation
If you will be paying anyone who falls under the category of an employee, this coverage is a must.  With so many lawsuits in today's world, and with such huge settlement awards, it could be economic suicide to lack this type of coverage.

If you are planning to use "free-lancers" instead(or independent contractors), make sure these people actually qualify as true independents.  There are a number of issues in the current tax codes that help to determine whether a person is a true independent or a disguised employee.  The burden of proof rests with you.  These various tests try to determine who really controls the worker overall.  The less actual control you have over this person, the more likely independent contractor status is possible.  Note that even if the person you use is truly an independent contractor, it may still become your responsibility to make sure they have up-to-date insurance coverage on themselves or their workers.  Otherwise, you may still be held liable.

Keep in mind that worker's compensation rates vary according to the category of the worker.  The riskier the type of job classification for worker's compensation rules, the higher the rate.  Be very specific with your insurance carrier in describing the job duties of the employee.  If you have any doubt as to the rate you are being charged, you can review the classifications in various insurance manuals that list all the codes.  Beyond this you may also request an insurance review.  Beyond that, you may call the state appeals board, and beyond that the state insurance department for a hearing.

Business Interruption Insurance
In effect, this insurance covers the situation where your business has to be shut down for a while due to an unforeseen, accidental circumstance like a fire, or flood.  The policy will pay you a certain amount depending on the coverage you select within allowable insurance carrier guidelines.  This keeps the cash flow going while you are trying to get the business going again.

Disability Insurance
Did you know that you are statistically more likely to become disabled than to die at a premature age?  Yet disability insurance is one of the most frequently overlooked – or underused – coverages for businesses.  That's for two reasons.  First, the business owner usually has more places to spend money than the money itself.  Couple that with "denial" nearly everyone uses when it comes to illness or injury, and the result is that disability insurance is sacrificed.  Also, it can be an expensive policy for the potential payout, especially for certain occupations.

So, how can a compromise be reached here?  One, consider getting a smaller amount of disability coverage to lower the rates.  Two, have the coverage kick in after a longer waiting period.  Instead of a 60 day period, use 180 days, or even 1 year.  That way, you are covered for the worst possible situation where you become disabled for the long term.  Let the short term prospects go on the assumption that you will be able to "scratch by" for this period.   

Health Insurance
For small businesses, this coverage can be expensive, especially if you are covering employees.  The four ways to cut down on the costs of this insurance are: 
1) Increase the amount of the deductible; 
2) Reduce the types of coverage; 
3) Use a shared, or co-pay cost system with the employees; or, 
4) Find a better group plan to use as the carrier.

Business Liability Coverage
This insurance handles the situation where someone may get hurt while in association with your business activities, or unplanned damages occur.  Examples: a customer tripping on your rug; a business owner/employee damaging a client's property; a theft or embezzlement; inventory damage due to fire, flood, etc.

Your coverage can vary widely.  A mistake many business owners make is in not adjusting this coverage as they become more successful.  They may have had minimal coverage in the beginning because the cash flow to pay for more just wasn't there at the time.  But then they forget to review and change the coverage as time goes on.  The value of the business equipment increases, the number of clients increase, the bank accounts increase.  Then the unplanned for event occurs, and the result of this could be a larger lawsuit or damage settlement than the insurance covers.  This could have disastrous results.

Sometimes these policies can be "piggybacked" with a homeowners policy and/or an umbrella-type policy to maximize the coverage and minimize the cost.

Keyperson/Buy-Sell Insurance
For businesses where there are partners, or key people whose demise could seriously hurt the operation and value of the business, this insurance can save the day.

Buy-sell insurance addresses the situation where the surviving business partner(s) are able to pay the heirs of the partner who died the allowable value of the deceased partner's share of the business.  Many times a business has value to it, but not enough liquid assets to pay out this value.  If there were no insurance, the business would have to be sold, or parts of it would have to be sold, to pay the heirs.  A second benefit of this type of coverage is that it frees up the business to the surviving owners instead of forcing them to deal with one of the heirs on a day-to-day basis from then on.  Keyperson insurance deals with the issue of death also, but not necessarily that of a partner.  You may have a particular employee whose expertise is crucial to the business.  This person is literally almost irreplaceable.  This insurance coverage protects you from a total loss.

Life Insurance
From a business standpoint, life insurance serves two main functions.  It leaves a nest egg to your designated heirs to replace the economic loss of your value to the business.  Also, it provides liquidity to cover any estate taxes that may be owed on the business.  If your business has any economic value at your death, there may be federal and/or state estate/inheritance taxes to be paid.  If there isn't enough cash to pay them, the business may have to be sold.  This could cause problems.  The business may not be easily salable, and it may have to be discounted heavily to get a quick enough sale to pay the taxes.  Proper life insurance can relieve your survivors of being forced to make decisions that they–or you–didn't want to make.

Vehicle Insurance
If you begin using your vehicle for business, the type of coverage you had on it prior may not suffice anymore.  This is especially true if others will be using your vehicle, or driving in it with you on business. Vehicle insurance coverage is notoriously unyielding if you violate any of the use provisions, or mileage provisions.  So be sure to review this carefully with your carrier if you will be using a vehicle for the business.

Conclusion
It's a good idea to consult with your insurance carrier BEFORE you begin a business, or change a business, to get advice on the types of coverage you may need.  This is true especially if you are using any portion of your home for running the business, or if you are using any of your vehicles for the business.

Don't assume the same types and amounts of coverages you started with in the business should remain static.  As your business develops, the needs, and coverage amounts usually change along with it.  Don't be left improperly covered.  Remember, once you need the coverage protection it is too late to discover it is inadequate, or, worse, there is no coverage because you failed to properly notify the carrier of a change in your situation.

Reference:  Practice Enhancers, Able & Co.

Keeping Business Tax Records

Keeping Business Tax Records
The period of time a business must keep records and the types of records required varies according to the statutory requirements of the particular government or agency involved.  The five main federal agencies are:  Internal Revenue Service, US Department of Labor, Wage and Hour Division, Immigration and Naturalization, Social Security Administration, and Equal Employment Opportunity Commission.  In addition, there may be selective state agencies that have their own particular requirements. However, the tendency is such that the federal agencies usually have more stringent requirements, so we will focus on them.

Keep in mind, however, that various civil and criminal actions brought against a business do not always follow these statutory time requirements.  That means nothing short of saving every scrap of business paper and record forever will absolutely provide a buffer from any and all challenges.  Nevertheless, the majority of situations do tend to follow government agency time requirements.  Since most businesses cannot possibly retain every document forever, they therefore choose to follow the federal agency requirements instead.

Before suggestions are made as to how long to keep different types of business records for income tax purposes, a brief synopsis of each of the major federal agencies and what they cover is in order.
Here's a quick rundown:

Internal Revenue Service:  This agency is the most well-known.  It handles all pertinent matters relating to federal income and estate tax returns.  Thus, any information filed on any of these types of returns must be retained for the IRS statutory period which will be detailed shortly.

US Department of Labor:  Employee wage matters, working conditions, ERISA rules, and other personnel matters fall under the jurisdiction of this agency.  Normal time requirements for retaining these types of records is 3 years.

Immigration and Naturalization:  This agency oversees the employment rules and regulations concerning the use of non US citizens, and verification of work eligibility.  The business must retain the I-9 employment verification form and employee records for 3 years after the date of hire.

Social Security Administration:  The business records for employee's earnings as they relate to social benefits available from this agency are regulated here. The statutory period is generally 3 years beyond the year of payment to employees and/or filing of appropriate returns.

Equal Employment Opportunity Commission:  The EEOC handles personnel matters as they apply to employee's rights on the job.  Thus, the personnel file related to these matters (such as pay rates, terminations, promotions, harassment complaints, etc.) should be kept for at least 3 years from the date of an employee's termination.

Since the biggest concern for most businesses is what the IRS requires for specific types of records, detailed below is a suggested breakout of the type of record, and the minimum time to retain them.

Please be advised that the normal statute of limitations is being used.  It may be longer in the situation where income or expenses are being distorted, such that it materially affects your tax liability (usually by 25% or more).  In that case, the period is 6 years.  Similarly, if fraud is involved, or failure to file, the statute of limitations doesn't expire.

Tips On Physically Keeping Records
First, wherever possible, try to have duplicates of records in two separate physical locations to avoid loss due to catastrophe like fire or flood.  If this isn't possible or practical, try to keep them safe from these possibilities in a fire proof or flood proof environment.  At the very least, protect the permanent or quasi permanent records such as contracts, insurance policies, real estate records, etc.

In case of IRS audit, the required proof for deductions can be both the cancelled checks and invoices, so save both, not just one.  This is especially true if payments were made to individuals, not businesses or corporations.  Without an invoice, the IRS could conceivably deny the deduction by taking the position that a check made out to an individual is a gift, hence not deductible.

You should always make sure someone you trust knows where all the important records, papers, keys, and necessary releases are located should something happen to you.

Hopefully, this will provide you with some guidance.  If you are ever in doubt as to how long to keep any specific record for tax purposes, it is always a good idea to check with your tax professional first before tossing it.  A good rule is: When in doubt, don't throw it out.

HOLDING PERIOD FOR VARIOUS TYPES OF RECORDS

ITEM	HOLDING PERIOD FROM FILING DATE
Tax Returns	Permanent
Cancelled Checks	3 years
Bank Deposit Slips	3 years
Bank Statements	6 years
Travel & Entertainment Reports	3 years
W-2's, 1099's, 1098's	6 years
Proof Of Tax Return Deductions	6 years
Credit Card Slips, Statements, Journals, Ledgers	3 years
Inventory Records	6 years
Minutes Of Meetings	Life Of Organization
Depreciation Schedules	Life Of Organization
Sales, Purchase Invoices	6 years
Corporate Stock Records	Permanent
Financial Statements	6 years
Retirement Account Information	Permanent
Employee Payroll Records	3 years beyond the year of termination of employee
Financial/Insurance Contracts	6 years beyond final year of contract

Capital             Expenditures/ Improvements	3 years beyond final year property is disposed of
Security Sales/Purchase Slips	3 years beyond the year the asset was sold
Closing Papers  On Properties	3 years beyond the year the property is sold

Reference:  Practice Enhancers, Able & Co.